There seem there are two extremes when it comes to investing. Those investors panic the first minute we experience a down day. Others are not phased at all since, after all, the market always bounces right back.
Warren Buffett is known for offering his investors these words of wisdom on more than one occasion. He intended to remind investors that everyone can look like a genius in a bull market, but undisciplined investing can leave you vulnerable during market downturns. Understanding and managing your risk is our number one job. Protecting against changing regimes and worst-case scenarios while providing exposure to growth is quite the balancing act. Still, financial science has proven that we can do it.
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